Challenges of the Arab Spring

The course analyzes challenges faced by transition and emerging-market economies, i.e., those middle- and low-income countries, which have conducted market-oriented economic reforms and become integrated into the global economy since 1990s.
It starts from a brief history of communist economic system based on central planning in the former Soviet Union and Central and Eastern Europe, its evolution and collapse at the end of 1980s/ early 1990s and subsequent transition to a market system in 1990s and 2000s. Then it analyzes experience of market reforms in China, India, other Asian countries, Middle East and North Africa, Sub-Saharan Africa and Latin America at the same period. Finally, it discusses the problems of contemporary global economy and global and regional economic governance with the special focus given to emerging-market economies and their role.
By the end of the course you will be able to analyse emerging-market economies and economies in transition, taking into account their crucial characteristics and historical experience.
Participation in the course does not require any preconditions, however, basic economic knowledge would be an advantage.
In order to pass successfully this course you must score not less than 80% for each of six after module quizzes and complete the peer-assessed essay at the end of the course.
Do you have technical problems? Write to us: coursera@hse.ru

Dear students, In this module we will discuss market reforms in the Arab world (including the period of Arab Spring), Sub-Saharan Africa, Latin America, summary of emerging-market reforms since 1980s.There will be 5 parts of video-lectures of 7-25 minutes length. You can use recommended literature to go deeper in learning this module. After you watch the video-lectures you are to complete the fourth quiz. We look forward to seeing you in class! Best wishes,Your course team.

教学方

Marek Dabrowski

Professor

脚本

[MUSIC] Now we'll speak about challenges of the Arab Spring and forthcoming economic social transition in the Arab region. Let's we start from a very brief history of the Arab Spring. It started in December 2010 in Tunisia and then immediately spread in early 2011 to Egypt, Libya, Yemen, Syria, and Bahrain. It also indirectly affected Jordan, Morocco and Kuwait, three constitutional monarchies which decided to embark on some political reforms. However, after more than three years, in early 2014, only Tunisia can be considered as tentative success story. It has a new democratic constitution, a relatively stable government, and it is implementing the economic program agreement with the IMF. On the other end of the spectrum we have tragic civil war in Syria, which negatively affects Lebanon, Jordan, Iraq and Turkey, neighbor countries which are direct neighbors with Syria. But let's turn now to a economic agenda. And beginning we will speak about short and medium term challenges, and then we turn to long term challenges. When we look for economic situation of the Arab countries we can find some similarities between Arab countries and the situation in countries of commoner more or less of independent states. Now, what I mean, this is sort of distorted capitalist market economy, but with various kind of distortion which are underpinned by poor business climate and underdeveloped infrastructure. Widespread corruption, nepotism, also in many countries dependence on commodity exports and incomplete integrations into the global and regional economy. And we definitely find less similarities between Arab countries and Central Eastern Europe. European countries which are either EU members or EU candidates. What are exact economic challenges in the Arab region in short and medium term? The most dramatic one is the humanitarian crisis resulting from the civil war in Syria. This is obvious. But, parallel or in next step we see also challenge of post-conflict reconstruction in Libya, Iraq and hopefully Syria. But in terms of current macro economic policy or the leadership, face the problem of very high fuel and energy subsidies, food subsidies, large, probably ineffective public sector. And as a result of increasing fiscal imbalances and public debt. And marginally, it must continue previous economic reforms, those which we described in the previous part, contacted '90, '80s, '90s and 2000s. But in more fair and transparent way to avoid this kind of distortion, which, we know this, let me start from the problem of energy subsidies which I already mentioned. And this is a huge challenge of the entire Middle East region. We have on this picture comparison of pre-tax on energy subsidies on the one hand and expenditure on education on the other. The blue bars, they're pre-tax energy subsidies. The red bars, they're spending on education. And we see that most of Arab countries spent a much more on subsidizing energy, gasoline, diesel fuel, heating coal, kerosene, natural gas, and other energy factors, center on an education. And these energy subsidies are going mostly to middle-income and higher-income parts of populations. They have cars, they have more electricity, and equipment, they're better off than these people use also the subsidies energy for interpretable production and service purposes. Another change which must be addressed this is a large sized, costly, but very ineffective public sector in Arab countries. And here we have comparison. What is the share of public sector wage bill in GDP? Meaning general government, so central government, local governments, and various government agency including education has sector, but without public enterprises. And we see that, that some countries like Egypt, Tunisia, Algeria, Morocco, and Saudi Arabia they have very high international standards level of expenditure for education. For example, in Egypt, even if it doesn't represent, the highest not the highest share of private sector wage bill in GDP. Some 30 percent of labor policies employed by this sector, so this gives us orientation in how much room for reforms and savings is here. But long term economic challenges are equally important. In most of Arab countries there are low to medium level income countries. Apart from Gulf monarchies, Lebanon and Libya. We see here the comparison. It's the green bars they're averages. So first one is for central eastern Europe. Over 14,000 of international dollars in 2010. 3,000 less is for CIS and 2,000 less. Below 2,000 is for the entire minor region including unproducing countries of Gulf region including Iran. So basically apart from Lebanon and Libya all other countries on this graph represent either middle income level, like Tunisia, or Algeria, or lower middle income or low income level, like Yemen. So there is still large room to catch up in terms of income level of these countries. And so we must distinguish between GDP growths even if this is four, five, sixth percent annually. And high population growth which this is still the region with one of the highest population growths, I mean, in the Arab world. So the per capita level is not catching up so quickly as, for example, China. Another challenge is low education level and gender inequality. And let's see here the graph which demonstrates illiteracy level. We here have comparisons of number of Arab countries with the worse performing central East European country Albania. And we see that the positive side is that, in the young generation between 15-24, there is higher level of literacy than all other age. So some progress has been accomplished. But still there is quite a large number of people who do not receive even elementary education and remain illiterate, especially among females. And this is striking in countries like, for example, Morocco, like Yemen, like Egypt, Iraq. But also all other countries still have some way to go to improve situation. And those kids who attend school, they usually do not complete more than five, maximum seven grades. And quality of education is still very, very poor. So, this has an autonomous impact on labor market. And here we see how high is the youth of unemployment rates. Especially among females, in most of the countries of the region. So consults on Mediterranean literature, and this was still a relatively good year, 2007, before the global financial crisis, before the Arab spring. Now in many countries these indicators deteriorated fast. In subsequent problem, which the entire region faced this is far going gender inequality. Gender discrimination female discrimination. And access to labor market and access to education, and we see in terms of secondary education. Female population is discriminated in Algeria, for examp, in Morocco, very heavily, but even in Turkey which doesn't belong, in Syria, in Tunisia, is and in terms of labor force participation rate, all countries apart from Israel, which is not Arab country. In all other countries we have far lower female labor participation rate. Usually below 40, even below 30, as compared to male labor participation rate, which is usually above 70 or above 80. And also business climate in the Arab region is pretty poor apart from the Middle East region. Again, apart from Israel, which is not an Arab country. And Tunisia, Jordan have some indicators I would say moderate level. Here there are three kind of indicators. We're fine doing business second column and here we see that countries like Algeria, Palestinian autonomy, Syria, but also Egypt, and even Lebanon on the most evil about doing very poor or relatively poor. The second column is Heritage Foundation Index of Economic Freedom. And here also several countries are doing poorly, especially Libya, but also Algeria, Syria and Egypt. And then, it's the transparency last column: Transparency International Corruption Perception Index. And here, again, there are several countries like Libya, like Syria, like Lebanon, Egypt, Algeria, which are rated very poorly in this rank. So corruption is here very high and, in many instances, increasing. And this is another kind of challenge related to regional conflict with many of them remaining unsolved, Israeli, Palestinian Israeli Arab conflict. But also there's no conflicts between, between Morocco or Nigeria over the Western Sahara. It's true and this is positive signs that level of expenditure as percentage of GDP heavily decreased since late 1980's. But still remain over the wealth average that's this dotted black line. In most countries apart from Tunisia and recently Libya, all other countries, they remain well above this average. So, this related those two countries, but also to represent nature of political system in those countries. And also, to some vested interest like in Egypt where the Army is not ready to give up its political and economic position as demonstrated by recent developments, actually, return to some kind of military dictatorship. And there are some other things, there are poor infrastructure and remaining trade protections. In spite of all progress achieved so far, which I spoke in the previous part, still countries of this region represent relatively high tariffs, high non tariff barriers, and poor logistic. Performance indexes which also are part of trade export and import costs. So this constitutes a trend for economic and social reforms in the region, which will take years and decades, but should be started soon in order to start the stabilization of political situation and most preferable, establishing of systemic democracies would be very helpful. In the next part we'll speak about Africa and Latin America. And then we'll turn to emerging market crisis. [MUSIC]